SRF (SRF) Q4 03/04 earnings summary

Executive summary

• FY03/04 net sales rose 10% to Rs.820.2 crore; PBT increased 32% to Rs.72.5 crore and PAT grew 30.4% to Rs.41.6 crore, despite lower operating margins.

• Cost efficiency, TQM and lower financing costs supported earnings; growth plans target capacity, R&D and a broader global footprint.

Financial highlights

• Net sales increased from Rs.745.9 crore in FY02/03 to Rs.820.2 crore in FY03/04; other income rose from Rs.12.6 crore to Rs.23.0 crore.

• PBDIT was Rs.143.3 crore versus Rs.145.3 crore; PBT rose to Rs.72.5 crore from Rs.54.9 crore and PAT to Rs.41.6 crore from Rs.31.9 crore.

• Financial expenses fell 48.3% to Rs.21.8 crore from Rs.42.2 crore; raw materials rose to 58.9% of net sales from 54.4%.

• Cash from operating activities increased 26.3% to Rs.141.5 crore; investing outflow was Rs.91.0 crore and free cash flow was Rs.50.4 crore.

Outlook and guidance

• FY04/05 outlook was positive for tyre cord, belting fabrics and coated fabrics; domestic GDP growth was forecast at 6.5%–7%, supporting expected demand.

• HFC-32 and HFC-134a production was targeted for commercial start in Q3 FY04/05; the Indore 20,000-tonne-per-year polyester film facility was expected to start by October 2004.

• Capacity plans included expanding belting fabrics from 5,000 to 7,500 tonnes per year and adding 13,300 tonnes per year of yarn capacity at Malanpur.

• Three pharma chemical products were in trial production for 2004/05 marketing; R&D expansion aimed to build advanced intermediates and contract manufacturing opportunities.